MIDDLE MARKET HIGHLIGHT, APRIL 2007

Grand Island
Dan Marcec

In the Grand Island, Nebraska, commercial real estate market, the retail sector is trending toward more specialized tenants in big box development, such as pet supply stores and electronics as opposed to discount department stores. Throughout the market, many new retailers and service providers have opened stores recently.

In addition, Grand Island hosts agriculture-related companies, food processing businesses and medical services. Activity in the industrial sector includes combine manufacturing; grain storage and handling equipment; plastic pipe manufacturing; plastic molding companies; and a beef packing plant. Some specific companies in the area include McCain Foods and Principal Financial customer service, while new companies to the market are Standard Iron, which works in metal fabrication, and J.C. Doyle software manufacturing. Further, O’Connor Enterprises, Starostka Group Unlimited, Lacy Construction Company and Don Mehring are some major developers currently active in Grand Island.

Generally, vacancy rates are very low across the board, and they rarely change. With increased construction coming online recently the vacancy rates have increased slightly, but the properties are being occupied relatively quickly.

“We are trying to attract metal fabrication, warehouse and distribution, and transportation business in addition to back office call centers,” says Marlan Ferguson, president of the Grand Island Area Economic Development Corporation. “With two major railroads, two exits on Interstate 80 and proximity to U.S. Highways 30, 34 and 281, as well as Nebraska Highway 2, we are located in an area conducive to transportation and logistics, and we are a blue collar community with a good work ethic.”

The Highway 281 corridor currently is seeing the majority of development in Grand Island, as the primary residential growth in the city is occurring west of this highway, and retail and medical services are located along it. “The accessibility for the public, availability of infrastructure, and the residential development are the keys to growth in that area,” Ferguson says.

Several significant developments are underway in Grand Island, which have contributed to the healthy commercial climate. First, an ethanol production plant presently is in the planning stages at the city’s industrial park; the project will raise the value of surrounding land to be used for future industrial development. In addition, at St. Francis Hospital — located east of Highway 281 on Faidley Street — a new $63 million, 80-bed tower will raise the patient capacity to 350. The new construction at the hospital also has spurred growth in other medical practices, as dental, eye care and specialized medical service offices are now underway along 281.

On the retail side, Ponderosa Pointe, a 500,000-square-foot lifestyle center, has received preliminary site plan approval at the corner of highways 281 and 34; a Lincoln, Nebraska-based group of investors is responsible for its development, which should spur future construction in the immediate area.

Looking toward the future, expansion appears likely in the South Locust area along the corridor running from downtown south to the Woodriver Flood Control project. A new Wal-Mart Supercenter opened at Highway 34 and South Locust in 2005, and the new $35 million, 7,500-seat Heartland Events Center is also located on South Locust.

“We feel the current growth will continue,” says Ferguson. “We should also see development in our existing industrial sector, where we anticipate securing additional manufacturing or logistics expansion projects.”


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